BUSINESS

Higher tax coming for big farms

PROKOPIS HATZINIKOLAOU

TAGS: Property, Taxation

The updated bailout agreement between Greece and the country’s creditors, reached on December 2, provides for the imposition of the supplementary property tax on plots of agricultural land too, unless rates on urban properties are hiked, with the aim of reaching the target of 2.65 billion euros in revenues from property taxation after the adjustment of the so-called “objective values” used for taxation purposes.

According to the agreement, the government has two options after the adjustment of the objective values in March 2018: either to raise the rates of the Single Property Tax (ENFIA) to reach the revenue target or to further expand the range of taxable properties. It is noted that while farmland is taxed through ENFIA, it does not count toward the supplementary tax that owners whose assets add up to at least 200,000 euros must pay.

Although the third bailout had provided for farmland to be included in the supplementary tax too, the tax authorities admitted they were unable to calculate its value so they exempted it. The new reference in the updated agreement points to the lifting of that exemption once the objective values are adjusted.

The text of the agreement dictates that the new values will have to be voted through Parliament by end-March and that they will be on a par with market rates. In this context, a special task force will be created, as well as a permanent online system for their constant adjustment.

This deal confirms that the government plan to set up 75 local committees across the country has been rejected. They were supposed to determine 10,000 zone prices, but this would have been done by various professional groups with doubtful criteria, so the country’s creditors asked for a special task force instead.

Finance Ministry officials made it clear that any reduction to stem from the adjustment of the objective values to the going prices will be offset by increases in many low-priced areas (such as Drapetsona, Ilion, Keratsini and Elefsina in Attica), as well as the hikes in the ENFIA rates.

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